Exchange traded funds (ETFs) that focus on currencies are infiltrating the market as hedging instruments and are gaining popularity among investors of all kinds as the dollar weakens. The dollar hit record lows against the euro this week. Lawrence Carrel for hones in on a couple of them:

  • CurrencyShares Euro Trust (FXE) – With $1 billion in assets, this is the original currency fund that has attracted a following. Currently, FXE is up 10.0% year-to-date.
  • CurrencyShares Japanese Yen Trust (FXY) – Rivaling FXE, this 7-month old ETF’s assets are surging as investors use it to play the falling dollar and an unwinding yen carry trade. The move out of U.S. assets caused the yen to jump even higher against the U.S. dollar. FXY gained $332.4 million in new money during the third quarter and is up 7.5% for the last three months.
  • iPath JPY/USD Exchange Rate ETN (JYN) – This ETN that came out in May benefits from the yen’s appreciation as well. It has accumulated a total of $87 million in assets. So far this quarter, both JYN and FXY have returned 7%. Having launched in May, JYN is up 8.0% for the last three months.

Read the disclosure, as Tom Lydon is a board member of Rydex Investments.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.